Today, we’re going to take a look at the best ways to send money internationally, so you can get the best exchange rates and enjoy the easiest possible experience.
Make the right decision here, and you could end up saving a lot of money. In fact, if you’re making a larger transaction, it could be a four-figure difference!
Currency exchanges – why you might get less for your money than you should
Imagine that you want to make sure your recipient receives $10,000.
As we write this, the interbank rate would make that $10,000 worth £7693.50. If converting USD into GBP.
Now, let’s say the bank has included a 1.5% mark-up in their ‘high street’ exchange rate.
Suddenly, you need to pay £7808.90 to send the same $10,000. A difference of £115.40.
If you were sending ten times that, you’re paying four-figures more than you need to.
(And that’s before you pay the additional fees you’ll often find in high street FX chains.)
This is why it’s important to find the best way to send money internationally: if you make multiple transactions over the year, these costs can really add up.
So, let’s go over your different options
Traditional High-Street Bank
Many people still rely on banks to send their money abroad.
This is understandable: people stick with what they know and, of course, it’s easy to pop into a bank chain on the high street.
So, convenience is a definite upside.
The downside, unfortunately, is that it can be an expensive option, and you may end up paying more than you need to.
See, in many traditional banking providers there are unofficially two exchange rates:
- The one that the banks use when they trade with each other (known as the ‘interbank’ rate) and…
- The one they charge you, the consumer.
The second Is usually above the interbank rate, meaning you may more for sending the exact same amount of money.
Within larger transactions, this can really add up. Sometimes to as much as four figures.
As a result, if you use a high street bank, sending money internationally can cost a lot more than it needs to.
(You’ve already seen how big a difference these hidden transactions can make.)
Many people view banks as the safest option, purely due to their established credibility. However, the truth is that any firms regulated by the Financial Conduct Authority are required to meet the same security standards.
High-Street International Transfer Firms
There are plenty of high street money transfer firms that can help you send money abroad.
Again, these companies will offer very fast money transactions, and you’ll be able to send smaller amounts with ease.
However, as with the banks, the fees for sending money abroad can be high. They often use a set percentage rate, which is fine if you’re sending micro amounts. But for larger transactions, it can mean a big levy.
It can also make a big difference where you’re sending the money. Some countries will cost a lost more to send to – in some cases, as much as 10-20%% of the principle amount!
The majority of these firms offer a level of security on a par with banks, which again can be re-assuring if you’re sending larger amounts.
Online payment companies
As with the high street, there are multiple sites that will allow you to send money abroad via the web.
Unfortunately, the fees for doing so are often above even the high street chains, adding up to as much as 3 or 4% over the base rate.
The main plus to this approach is, of course, convenience. It’s hard to beat making your transfer while sat at home on the sofa.
Of course, it’s down to you if you’re prepared potentially a lot more for your transaction for that convenience.
Bespoke FX brokers
More and more people are realising that dedicated FX brokers can offer a rate far, far lower than you’ll find on the high street, combined with more transparency about exactly how much you’re paying.
Put simply, FX brokers can offer you a great rate that’s much better than you’ll get in the banks. And rather than hide fees or commission, there’s typically a single flat fee for making the transfer.
(This fee will usually be low enough so that compared to the bank’s rates, you’ll still be much better off.)
At Privalgo, for instance, our FX specialists understand how different events can affect the markets, which mean that they can help you plan accordingly, and help you time your transaction.
How much are you transferring?
For very small amounts, it’s possible that a high street specialist or a bank might be the better option.
However, as soon as you start moving to larger amounts, a good FX broker should be able to save you a lot of money when sending money internationally.
Get in touch today
If you’d like to find out exactly how much cheaper your FX transfer could be, fill in the form to the right and Privalgo will get right back in touch with you.